Setting a precedent for IVAs and PPI refunds—Green v Wright

Setting a precedent for IVAs and PPI refunds—Green v Wright

UPDATE (1): This case is being appealed. The hearing of the appeal in the Court of Appeal was listed for 18 May 2016 but was vacated. The hearing has now been fixed for 15 November 2016.

UPDATE (2): The Court of Appeal's judgment is due to be handed down on 1 March 2017 at 2pm (see the Court of Appeal's cause list).

UPDATE (3): (March 2017) In its judgment ([2017] EWCA Civ 111), the Court of Appeal has allowed the IVA supervisor's appeal.

To see analysis on this decision, see Lexis®PSL News Analysis:  PPI claims survive completion of IVA for creditors (Green v Wright).

In the first case of its kind, the High Court in Manchester has given some much needed clarity on the issues surrounding the completion of individual voluntary arrangements (IVAs). Kathryn Maclennan, a solicitor at Stephensons Solicitors LLP who acted for the debtor, explains the implications of the judge’s decision.

Original news

James Green (former Supervisor) v James Wright [2015] EWHC 993 (Ch), [2015] All ER (D) 223 (May)

The High Court in Manchester has ruled in favour of the debtor in a dispute over voluntary arrangements. The decision was made on 9 February 2015. The judgment and case citation are not yet available.

What was the background to the case?

I was approached to act for an individual who had entered into an IVA with his creditors. An IVA is a legally binding agreement between an individual and their unsecured creditors. Such agreements normally last for five years and during that period the debtor makes payments they can afford and/or realises assets available. Such payments are made to a supervisor who must be a licensed insolvency practitioner. At the conclusion of the IVA the funds held by the supervisor are distributed by way of dividend to the creditors bound by the IVA and such dividend is accepted by those creditors in full and final settlement of the debt.

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.